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Evening markets: poor crush data squashes soybeans

Weak data from oilseed processors accelerated a drop in Chicago soybeans, sending the best-traded November contract down 3% back below $10 a bushel.

US soybean crushers used 120.9m bushels of soybeans last month, nearly 10m bushels below the figure analysts had expected and 12m bushels down on the June figure.

Concerns for demand were further stoked by deliveries of an unexpectedly-large 244 lots on Chicago's August contract, which disappears from trading boards later on Friday.

Deliveries are taken as a sign of holders of beans wanting an exit - rather than contracts being settled as a matter between speculators.

Furthermore, weather forecasts remain good for the US crop, which is going through the vulnerable pod-setting stage.

Oil slumps

And, as if traders needed another excuse to sell, external stimuli were unhelpful.

The dollar gained ground against major currencies, making US exports more expensive, amid talk of US deflation and weak American consumer confidence data, which trimmed investors' appetite for risk.

Equity markets weakened, with September oil standing 3.8% lower at $67.87 a barrel in New York at 17:00 GMT.

Back in Chicago, November soybeans slipped 3.0% to $9.89 a bushel, treading on its lowest territory for the month.

The offending August contract headed for a weak demise, down 6.6% at $11.08 ½ a bushel.

'Aggressive seller'

Corn was weaker too, down 1.2% at $3.20 ½ a bushel for September delivery, as continued benign weather absorbed more of the risk premium baked into a delayed crop.

Wheat, for once, led the pack, up 2.25 cents at $4.83 ¾ a bushel for September delivery – although not before setting a fresh year-low of $4.73 ¾ a bushel.

The prospect of an abundant crop has continued to keep a lid on wheat prices on both sides of the Atlantic, with London feed wheat for November ending £0.35 lower at £97.75 a tonne.

"Denmark, like most areas of north-western Europe, has seen strong yields and has therefore been an aggressive seller of feed wheat, comprising partly old crop stocks sold to relieve storage space and partly new crop," Hugh Schryver, at Glencore, said.

Quality question

Milling wheat has also lost some of its premium among some thoughts that the quality of EU crops may be better than had been feared.

"UK wheat quality looks, so far, to be better than last year," Mr Schryver said, while adding that there were questions over protein levels in German wheats.

"Presently, the millers are really only buying for September as they continue their testing of new crop samples.

"This process of assessing the crop takes time and it may be a number of weeks before millers enter the market in earnest for their autumn and winter supplies."